Lack of homes for sale hampering buyers in the United States
A lack of homes for sale across the United States continues to limit choices available to potential buyers, putting a strain on markets across the country, new research reveals.
In January buyers had 8.6% homes to choose from than they did last year, according to the latest real estate market report from property firm Zillow.
It also shows that housing starts reached a three month low in January, indicating that newly built homes will not be a significant benefit for buyers, either.
The firm says that a restricted supply of homes for sale will mean increased competition for homes that are available, and bidding wars that can price out entry level or first time buyers. Low inventory, along with a strong job market has been driving up home prices, especially on the West Coast.
Across the country, only a quarter of markets saw inventory increase over the past year. Among the largest metros in the country Atlanta saw the largest increase in available homes for sale at 6.8% while buyers in San Diego have significantly fewer options with inventory down 30%.
Besides inventory, Zillow looks at price cuts and days on market to help identify whether markets are better for buyers or sellers. It found that markets that benefit sellers are mostly grouped in the West, where buyers are more likely to face bidding wars. Buyers will find themselves with more bargaining power in the East, in markets like Philadelphia and Baltimore.
‘If you're looking for a home or trying to sell, it's important to know what kind of market you're in. Hopeful buyers in a strong sellers' market should be prepared to move quickly, since homes don't stay on the market as long,’ said Zillow chief economist Svenja Gudell.
‘In a buyers' market, they can afford to take their time and be more selective. However, low inventory is a factor affecting the majority of the country, so buyers should be prepared for a limited selection as we enter the home buying season,’ she explained.
National home values rose 4.2o % $184,000, according to the Zillow data meaning that the pace of home value appreciation has increased for 10 months in a row. Denver and Dallas continue to lead the way, with strong double digit increases in home values.
Rents, on the other hand, continued their recent trend of levelling off, growing 2.9% year on year from January 2015. San Francisco was the only large metro to see double digit rent increases.